Commercial Court No. 1 of Barcelona appoints insolvency administrator of La Seda de Barcelona SA

MOSCOW (MRC) -- Spain's La Seda de Barcelona SA (LSB), which makes plastic bottles in Europe, Turkey and North Africa, has announced that, as a continuation of the press release dated July 4, 2013 on the Company’s insolvency, on July 15, 2013 the Commercial Court No. 1 of Barcelona appointed Mazars Financial Advisory SL as Insolvency Administrator of LSB and the other 12 companies of the Group who should accept the post within a maximum of five days, reported Reuters.

The aforementioned companies of the Group include: Artenius Espana SLU, Artenius Green SLU, Industrias Quimicas Asociadas LSB SLU, Artenius Italia SpA, Artenius Hellas Holding SA, Inmoseda SLU, APPE Benelux NV, APPE Deutschland GmbH, APPE UK Ltd, APPE France SAS, APPE Iberia SAU and APPE Polska Spolka Z Ograniczona Odpowiedzialnoscia.

As MRC informed previously, La Seda de Barcelona said in mid-June that it would begin insolvency proceedings after failing to reach a deal with creditors. La Seda had a debt load of just EUR600 million (USD800 million) at the end of 2012, including debt to providers. Catalonia-based had been in talks with its lenders since September last year after its business ran into trouble because of high raw materials costs and excess supply of the PET plastic containers that it makes.

La Seda de Barcelona SA (LSB) is a group of companies, involved in the manufacture and recycling of PET and PTA resins, industrial chemicals, preforms and biodiesel.
MRC

MOSCOW (MRC) -- Sipchem Chemicals Company (SCC), an affiliate of Saudi's Sipchem, has signed on July 22, 2013 an incorporation agreement with Hanwha Chemicals Corporation to form a new company, under name of "Saudi Specialty Products Company" for establishing conversion projects in Saudi Arabia. according to Sipchem's press release.

This move was down "in line with the company's commitment to implement what has been stated at volume of fuel and feedstock allocation required to establish EA, EVA, WCC and conversion industries issued by Ministry of Petroleum and Mineral Resources".

The Joint Venture between SCC and Hanwha comprised of two manufacturing facilities; the first one located at Hail will produce 4,000 MTPA of EVA films whereas the second one located at Riyadh will manufacture plastic moulds up to 1000 tons. It is noteworthy that Sipchem Chemicals Company owns 75% of new company capital while Korean Hanwha owns 25%.

Sipchem Chemicals Company will use state of the art technology of Mitsui Chemicals Tohcello (MCTI) Inc. Japan, for the EVA film project and Kiefer Werkzeugbau GmbH, Germany, knowhow transfer and project services for moulds project.

Total investment for these conversion projects will be approximately SR 225 Million (US Dollars 60 Million) and will create employment opportunities for around 180 personnel.

EVA film is used for crystalline silicon and thin film solar photovoltaic module production. EVA film is selected to be the most optimum material for the encapsulation and it is widely used for solar cell encapsulation and perceived to be the most operating-friendly and cost effective material for solar cell glass encapsulation.

This project is the first-of-its kind in the region and illustrates Sipchem commitment towards the Kingdom objective to become a driving force in renewable energy.

On the other hand, Moulds Manufacturing Facility, located in Riyadh, has been designed to manufacture various types of moulds and dies used in plastic and encapsulation plants.

Sipchem has confirmed that its approach to join hands with major players in the global petrochemical business to support Saudi Arabia downstream manufacturing investments.

We remind that, as MRC wrote previously, in December 2012, Sipchem launched the construction of its EVA films project in Hail Industrial City. The SR 120 million plant will manufacture 4,000 tpa of EVA films. The project will be financed by the company and other local backers and is expected to be operational by Q3-2013.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- Czech oil group Unipetrol cut its net loss in the second quarter to 426 million crowns (USD21.7 million), helped by its petrochemical and retail segments while the refinery segment weighed, said Reuters.

The loss was narrower than the average estimate of a 482 million crown loss in a Reuters analyst poll and smaller than the 598 million crown loss reported a year ago.

But earnings before interest, tax, depreciation and amortisation (EBITDA) excluding inventory writedowns fell to 663 million crowns from 1.36 billion a year ago, mainly due to a negative number from the refinery segment.

"It is a warning sign that Unipetrol's refining arm is a lossmaker in this environment even on the EBITDA level, which means that the business is burning cash at the moment," Ceska Sporitelna said in a note.

"We do not see a change in the environment, which means that the business is likely to be lossmaker this year."

The refinery segment was hit by lower margins and a drop in sales due to an unplanned shutdown at the Kralupy refinery at the turn of May and June.

EBITDA excluding inventory revaluation in the refining segment alone was at -151 million, down from 355 million a year ago.

The downstream oil processor, majority-owned by PKN Orlen , said it planned a periodic turnaround at the Kralupy refinery in September and October. Capital expenditures for the project are estimated at 600 million crowns, the company added. (USD1 = 19.6688 Czech crowns).

As MRC wrote before, Unipetrol is preparing a number of modernisation projects: construction of new polyethylene and DCPD units, de-bottlenecking of polypropylene production. It also intends to continue the restructuring process (revamping of the residual oxidation unit (POX), possible closure of the ammonia unit). By 2017, the Company plans to increase the capacity utilisation of the pyrolysis plant by 13%, and improve sales of petrochemical products by 11%, to 1.4m tonnes.

Unipetrol , a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The Unipetrol Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the Unipetrol Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs almost 4,000 people.

MRC

MOSCOW (MRC) -- PKN Orlen suffered a PLN 207 mln attributable net loss in Q2 2013, missing expectations for a loss of PLN 160 mln and down from a fractional loss in the year prior period, H1 financial report out Tuesday morning showed, said Pap business.

EBITDA of PLN 398 mln was down 34% from the consensus expectation. Inventory effects ate at reported earnings. Restated to LIFO accounting, EBITDA would have come to PLN 837 mln, still down 53% year on year from PLN 1.78 bln in the prior year period.

Of that PLN 939 mln in reduced LIFO EBITDA, management said PLN 699 mln had been casued by deteriorating macroeconomic factors including declining margins, tightening Brent/Ural differentials and FX moves.

Orlen suffered a 22% decline in its model refining margin to USD 5.3/bbl, still a notable increase from the USD 4.1/bbl noted in Q1. The annual declines included a 12.6% decline for gasoline and a nearly 8% y/y decline for diesel margins. Total refining and retail volumes for the group were up 7.3% y/y.

In petchem, margins suffered a smaller 5.6% y/y decline to EUR 729/ ton, down fractionally on Q1 levels. Petchem volumes rose 4.0% year on year to 1.23 mln tons.

Another PLN 362 mln in reduced earnings came on one-offs and trading margins. The sale of a tranche of mandatory reserves brought a PLN 144 mln negative one-off which managemen said will be compensated by hedging. The year-on-year comparison was also spoiled by a prior year period positive one-off, management said.

Further on the P&L, Q2 net financial expenses came to PLN 127 mln, chiefly PLN 117 mln in net foreign exchange losses on revaluation of loans.

As MRC wrote before, PKN Orlen, one of the largest oil and gas companies in Europe, has offered for sale a second PLN 200m tranche of its bonds and expects the proceeds from the entire bond issue programme to reach approximately PLN 1bn. This move was done in response to the enormous interest in PKN Orlen bonds on the part of investors, who subscribed to the entire PLN 200m of the first series of bonds in just two days.

Polski Koncern Naftowy ORLEN S.A. (PKN Orlen) is a Polish oil and gas company. It has a lot of petrol stations in Poland, Germany, Czech Republic, Lithuania and Slovakia. It is the biggest company in Poland and one of the biggest oil and gas companies in Europe. Polish group PKN Orlen PKNA is a majority owner - 63% of czech polyolefins manufacturer Unipetrol.
MRC

MOSCOW (MRC) -- DuPont Co.is considering a spinoff or sale of its performance chemicals unit, which makes titanium dioxide pigment and Teflon coatings, to focus on less cyclical products and boost shareholder returns, said Businessweek.

DuPont, the biggest U.S. chemical maker by market value, may pursue different paths for each business in the segment, which had sales of USd7.2 billion last year, the Wilmington, Delaware-based company said today in a statement. The unit makes white pigment for paints, cyanide, Freon refrigerants and Teflon coating for nonstick pans, among other products.

"The attractive financial strength and cash-generating capabilities of these businesses must be continuously weighed against their higher volatility, cyclicality and lower growth profile," Chairman and Chief Executive Officer Ellen Kullman said on a conference call.

Under Kullman’s leadership, DuPont has continued its shift away from traditional commodity chemical products toward higher-margin businesses that capitalize on meeting global demand for food, energy and security. The company acquired Danish food ingredients and enzyme maker Danisco A/S in 2011 for about 33.4 billion kroner (USD5.9 billion). DuPont sold its auto paint unit this year for USD4.9 billion.

Volatile earnings from performance chemicals prevent DuPont from realizing the higher valuation inherent in more stable, growing businesses such as agriculture, said Matt Arnold, a St. Louis-based analyst at Edward Jones who has a buy rating on the shares.

The segment’s second-quarter operating profit fell 56% because of lower prices for refrigerants, fluorpolymers and titanium dioxide, a white pigment used in paints and plastics. Titanium dioxide demand has begun to recover, rising 12% from a year earlier, the company said.

The titanium dioxide industry is going through a period of upheaval. Princeton, New Jersey-based Rockwood Holdings Inc.plans to sell or spin off its unit that makes the commodity while Stamford, Connecticut-based Tronox Ltd. said in February it was interested in adding to its titanium dioxide assets. Huntsman Corp., another U.S. producer, has said it wants to participate in the industry’s consolidation.

As MRC wrote before, Huntsman Corp, the U.S. chemicals producer founded by Jon Huntsman Sr., is considering an offer for Rockwood Holdings Inc. titanium-dioxide pigments business. Such a deal would create a titanium-dioxide maker with about 15% of global capacity, vying with Cristal Global as the world’s second-largest, after market leader DuPont Co.

MRC